India drops plan for external aid agency

By jpgupta |

8th June 2010

Three years after being first mooted, the proposal to have a central agency that would oversee assistance to other countries has been given a quiet burial by the Ministry of External Affairs (MEA).The proposal had first surfaced in 2007 in the budget speech of then Finance Minister P Chidambaram, who had been sounded out on the concept by then External Affairs Minister Pranab Mukherjee.

New Delhi: Three years after being first mooted, the proposal to have a central agency that would oversee assistance to other countries has been given a quiet burial by the Ministry of External Affairs (MEA).

The proposal had first surfaced in 2007 in the budget speech of then Finance Minister P Chidambaram, who had been sounded out on the concept by then External Affairs Minister Pranab Mukherjee.

The proposal was finally given a quiet burial this year after having been plagued by long delays and debates of inter-ministerial jurisdiction.

"It was a simple turf war. Nobody wanted to give up their powers," a senior government official who was privy to the process said.

The proposed institution had even got a name — India International Development Cooperation Agency (IIDCA). It was supposed to bring all activities related to development cooperation, as reflected in its name, under one umbrella.

"In keeping with India's growing stature in international affairs, we must willingly assume greater responsibility in promoting development in other developing countries," Chidambaram had said in 2007.

It was an expression of the fact that in line with its rising international profile, India has been using aid, grants and soft loans as an instrument of diplomacy, especially in Africa and South Asia.

In a presentation before the parliamentary standing committee in early 2007, then Foreign Secretary Shiv Shankar Menon had said the agency would be the one-stop shop for coordinating all projects, lines of credit, technical cooperation, deputation of experts and training of foreign nationals in India.

It was envisioned that the activities will be managed more professionally so that "delivery will be much more prompt and efficient than it has been in the past".

The MEA then had three months to get the agency on its legs.

At present, the Ministry administers the deputation of experts, special projects and management of training for over 5,000 foreign personnel through the Indian Technical and Economic Cooperation (ITEC) programme.

The Finance Ministry, however, is the nodal agency for managing over 130 lines of credit worth US $4.5 billion, extended to 94 countries.

Other major donor countries usually have an autonomous agency to administer aid, like USAID and Britain's Department For International Development (DFID).

An internal taskforce was formed to prepare the concept paper, chaired by the Additional Secretary (Economic Relations). The recommendations were submitted to the Foreign Secretary in April 2007, with the External Affairs Minister formally approving the concept.

A draft cabinet note was prepared in May 2007, which was circulated to the Ministries of Finance, Commerce and Industry and the Planning Commission.

According to official records, the commission approved the IIDCA proposal "without any reservation or qualification".

But once the note left the External Affairs Ministry, the idea did not seem to go anywhere, getting stuck in circular consultations and numerous revisions.

The MEA forwarded it to the Cabinet Secretariat, which forwarded it to the Committee of Secretaries for scrutiny, sources in the Ministry said.

In July 2007, the Finance Secretary had asked for a modification of the draft cabinet note at a meeting with the Foreign Secretary and Commerce Secretary. A redrafted note was submitted for cabinet approval in March 2008.

Further changes were suggested, which delayed the submission of the note. But the cabinet had sent back the proposal a second time for revision.

The official reason for the delay was the "long-drawn process" of inter-ministerial consultation.

In between, the agency had even been renamed the Indian Agency for Partnership in Development (IAPD).

Finally, this year in April, the Ministry gave up, formally. The official last straw was the objections of the Department of Personnel and Training, which had "questioned the rationale" behind the agency.

Answering a query from the standing committee, the Ministry said decision had been taken that the "proposal regarding IIDCA/IAPD may be dropped and the desired objectives be met by strengthening the MEA Divisions concerned".